The Federal Reserve Banking System - Building A Monopoly One Crisis At A Time
Thursday, December 18th, 2008
Total Borrowings of Depository Institutions from the Federal Reserve is a data point catching alot of attention as the financial universe reaches for some form of a new normal. There is concern about what the large increase in the figure represents and what it may entail.
Data Measured By Total Borrowings of Depository Institutions from the Federal Reserve
What data does the total borrowings of depository institutions from the Federal Reserve actually measure? According to the note section of the website, the series represents:
- primary, secondary, and seasonal credit
- primary dealer and other broker-dealer credit
- asset-backed commercial paper
- money market mutual fund liquidity facility
- other credit extensions, inclusive of credit extended to American International Group, Inc.
Time series of total borrowings
The most noticeable feature of the following chart is the data is figuratively moving off of the chart. Realistically, the axis needs to be realigned to accommodate the nominal increase in year over year increases.
Time series of total borrowings represented in year over year change in total dollars through December 10th, 2008
Time series of total borrowings represented in year over year change in total dollars through December 10th, 2000
It is being reported by CNBC commentator Dylan Ratigan that the Federal Reserve has agreed to extend AIG an eighty-five billion dollar “bridge loan” to assist in helping the ailing insurer avoid bankruptcy. In consideration for the capital, AIG will grant the Federal Reserve a warrant to acquire up to eighty percent of the company. 